Friday, December 15, 2017

Strongest annual increase in consumer spending for two years

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Latest figures by the Visa UK Expenditure Index indicate that the green shoots of consumer recovery are sprouting as spending increased by 0.4% compared to May.

It was the second-strongest monthly increase in expenditure since last September.

Household expenditure increased by 2.1% year-on-year in June, up from 1.5% in May.

Visa Index is based on spending on all Visa debit, credit and prepaid cards, which are used to make an average of over 1.9 billion transactions every quarter and accounts for a third of all UK spending.

Chris Williamson, Chief Economist at Markit said that bad weather was limiting growth alongside the twin headwinds of high inflations and record weak pay growth. He said: “The data adds to the picture of an economy that is on the mend, but progress is frustratingly slow.”

Spending increased in four of the eight broad categories in June including the Goods & Services category and financial services (e.g. insurance premiums). Expenditure also increased solidly in Hotels & Restaurants, Transport & Communication and marginally in Household Goods.

Health & Education and Clothing & Footwear announced flat spending in June, after six months of reductions, which may provide an improved backdrop for some of the General Retail stocks that have registered downbeat trading statements.